Research

Abstract: We study Argentina’s 2023--24 disinflation as a regime-shift episode. Using event windows around the October 22 first round and Javier Milei’s November 19, 2023 runoff victory, we show that political news about future fiscal adjustment led to a sharp repricing of medium-horizon market-based inflation compensation. Measures such as `1y1y` and `2y3y` inflation compensation rise after news that lowers the perceived likelihood of fiscal reform and fall after news that raises it. Forecasts from 14 professional institutions then revise gradually toward stronger expected fiscal balances, consistent with markets moving first and forecasters updating more slowly. Expected nominal policy rates also decline after Milei’s election, which is hard to reconcile with a standard monetary-tightening account. The subsequent fall in monthly inflation from 25.5 percent to 4.3 percent within five months matches the earlier market repricing, pointing to fiscal regime change as a central driver of Argentina’s stabilization.

Abstract: Prediction-market contracts look like state-contingent securities, but their usefulness for hedging depends on the actual menu, prices, and liquidity of listed claims. This paper studies that distinction using Kalshi CPI contracts, which pay when one-decimal reported inflation is above a threshold. I construct quote-consistent no-arbitrage intervals for inflation swaps, caps, floors, corridors, and tail payoffs, and use interval width as a model-free measure of hedgeability. Kalshi CPI prices contain useful information about inflation outcomes: the final Kalshi-implied YoY mean has a 0.968 correlation with realized YoY CPI, and calibration improves Brier scores for both YoY and MoM events. But the same contracts provide weak hedges in the full listed market. Median no-arbitrage widths are 9.69 percentage points for a YoY swap payoff and 4.95 for a YoY cap payoff. The actionable-looking market is much smaller: in baseline YoY observations, the median maximum quote age is 331 hours and the median number of quotes updated within 24 hours is zero. The results show why informative prediction markets need not be good hedging markets: sparse threshold claims, bid-ask frictions, stale quotes, and payoff mismatch leave many inflation exposures poorly spanned.

Undergraduate Honors Thesis under supervision of Barry Jones.

Abstract: I extend Calvo and Velasco's (2022) model of monetary-fiscal coordination by incorporating explicit active (non-Ricardian) and passive (Ricardian) fiscal policy rules, following Leeper (1991). This extension provides richer bond price dynamics, revealing additional scenarios requiring policy coordination, while overturning others. Using analytical solutions to the model's differential equations, I demonstrate that monetary intervention is only necessary under non-Ricardian fiscal policy, while Ricardian fiscal policy is neutral. While this finding overturns some of Calvo and Velasco's results, it maintains the broader flavor about the interconnectedness of monetary and fiscal policy. The model provides insights into policy responses during the Covid-19 pandemic and offers a framework for analyzing future crisis responses.

Using a comprehensive dataset of U.S. Treasury securities dating back to 1776, I examined how the Louisiana Purchase bonds— which expanded U.S. debt by approximately 20% (equivalent to 95% of annual government revenues)—set a precedent for U.S. sovereign debt as a global financial instrument. Unlike most pre-1920 U.S. bonds, which were illiquid and uniquely tailored to congressional authorizations, these bonds achieved unprecedented international marketability, trading in London, Paris, and Amsterdam. Facilitated by international merchant banks, this innovative structure enabled the U.S. to execute a massive financial expansion while maintaining fiscal credibility. This episode marked a key developmental stage in the evolution of U.S. Treasuries into the world’s predominant safe asset, illustrating how institutional credibility and strategic financial engineering can enable large-scale national expansion without destabilizing debt markets. This work was published as a Jupyter Notebook and can be accessed on Tom's website. 

Presented at 49th Eastern Economic Association Conference, 2022, November.